Most of us want to give back, help out, make a difference in the world on a local, regional, national, international, or individual basis. In my blog from February 10, 2015, My 5 Tech Trends for 2015: How will they impact you and your organization I looked at how the digital age was changing fund development for organizations. It is also changing the landscape for those who give, and this blog outlines how.
Like most people at tax time, I reviewed my charitable contributions to declare on my taxes. It prompted me to review the other contributions I had made that are not able to be declared because the dollars, time, goods, etc. I gave did not go to a 501(C)3 charitable organization. I either gave directly to a needy family, person, or cause, not thinking of a tax benefit, and know that those contributions did a lot of good. Donating money at a fundraiser for a family in my town devastated by cancer; donating cans of food to the USPS food drive; buying presents for the giving tree at Christmas time; paying for a hungry young person’s sandwich when they didn’t have enough change, etc. You also have this kind of list, I am sure.
This kind of giving, to me, is part of our humanness. Although easier to do on a local level, the digital age has ushered in a new age of philanthropy where this personal kind of giving can be done for larger causes while still going directly to the source of need.
The Spring 2015 issue of the Stanford Social Innovation Review had an article that outlined how technology was changing the philanthropy field. Disruption for Good by Laura Arillaga-Andreessen outlines the ways that technology is personalizing giving and providing a more intimate relationship between giver and the cause or organization they are giving to. The article begins:
Until recently, someone making a small gift—whether placing a few dollars in a collection basket, sending a check in response to a mail solicitation, or donating via a credit card—felt like he was putting money into a black hole. Tracing how the money was spent was almost impossible, as was measuring the impact of those dollars. Enter technology. Although giving into the black hole still happens virtually through the many “donate now” buttons, a new generation of digital-savvy nonprofits is enabling donors not only to go online to donate a few dollars anywhere, any time, but also to receive direct feedback (including photographs, videos, data, or messages from the recipients themselves) on how their gift is helping transform lives or solve social problems.
The article goes on to say that the new philanthropists are not just donating money, but are contributing ideas, feedback, and suggestions for service improvement and delivery. Social media has enabled anyone, not just major donors, to actively and deeply engage with a cause:
But for committed givers, technology can enable greater impact. Whether participating in problem solving or getting real-time feedback on the impact of a program, everyone now has levels of access once available only to major donors and large organizations. Technology now reaches people who might never have thought of themselves as philanthropists, engaging a new generation of change makers…..By increasing access and lowering barriers to entry and innovation, technology is enabling the democratization of philanthropy.
Arillaga-Andreessen outlines critical areas where technology is impacting donor decisions:
- Greater access to information: donors can find research reports and other data sources that help donors calculate the impact of their money, time, or resources. After analyzing available data, donors can evaluate where they can do the most good, as well as who is doing the most effective work in the area. This helps donors make better choices that are aligned to their priority areas for giving, and to whom to give their money.
…. online evaluators are doing valuable legwork for donors. GuideStar International provides information on millions of nonprofits in the United States, the United Kingdom, Belgium, India, and Israel. GreatNonprofits develops tools that allow people to identify, review, and share information on effective charities. GiveWell compares the impact and relative cost of different nonprofit organizations and makes recommendations to donors, helping them decide where to give. And a relative newcomer, theSocial Impact Exchange’s S&I 100 index, uses third-party evaluations to assess nonprofits’ impact and scalability. Armed with this kind of knowledge, donors can make far more informed decisions about where to distribute resources.
- Greater access to networks: connecting donors to each other to share their passion, develop new innovations, and interact with
beneficiaries creates a giving community that can tackle financial, service, and social issues that arise. Networks can also engender communal giving where people, groups, or organizations come together to fund a large project or give meaningfully to a cause. For example:
Change Gangs unites a group of giving circles donating to pets, poverty alleviation, and veterans. As people reach out to their networks, donors who don’t otherwise know each other can coalesce around a cause or issue.
Interestingly, FaceBook likes and other social media do not necessarily translate into monetary donations. People view “liking” a cause enough of a contribution.
A recent study in the journal Sociological Science found that only 0.24 percent of people who “liked” the Save Darfur Cause on Facebook actually donated to the organization. And a recent study by Blackbaud found that only about 1 percent of online fundraising occurred through social media; just 2 percent of American nonprofits raised $10,000 to $25,000 through Facebook; and a mere 1 percent raised $25,000 to $100,000 on Facebook.
- Lower barriers to entry: donors can now either set up their own philanthropies, join with others for more impact, crowdfund, and use networks to increase impact and return on investment.
…. the connectivity of the Web and social media means anyone can launch a giving movement or an advocacy campaign, informing and inspiring thousands of people at relatively low financial cost.
- Lower barriers to Innovation: by using and creating networks of like-focused people, ordinary donors can band together to drive new practices and new solutions to intractable problems.
Most philanthropic funding, however, comes from ordinary people with extraordinary generosity, not from the millionaires and billionaires who appear in the mass media. And to be effective in their giving, these ordinary people also need access to communities in which they can exchange ideas and sources of innovation. Social networks are beginning to transform the way that individual philanthropists collaborate with one another. The matchmaking power of the Web creates networks of donors who would otherwise have no way of finding one another.
- Call to Action: because of the ability for individual donors to connect, there is a greater potential to solve, or at least make headway in, the intractable problems of today and tomorrow. Action, not just financial donations, can be the driving force for many who want to do, not just give.
Empowered by technology, philanthropy is in the nascent stages of what could be a significant transformation—moving from relying on good intentions to achieving greater scale and measurable impact.
In her March 2007 TED talk, You are the Future of Philanthropy, Katherine Fulton, president of the Monitor Institute, predicted that technology and the digital age would change the emphasis from “thinking our way to acting to acting our way into the next way of thinking”. She identified five new disruptions in the philanthropic world that lead to less emphasis on organizations and nonprofits delivering services and more emphasis on collective, directed donations by individuals.
- Mass Collaboration, such as wikpedia, has developed a living resource that is cared for by volunteers all over the globe. This type of mass collaboration can be applied to tackling social and economic issues as well.
- Online Philanthropy Marketplace, where peer to peer philanthropy is supported by entities that match donors and beneficiaries. These already exist, such as DonorsChoose, which matches classrooms across the country with donors who purchase specific items requested by the teacher.
- Aggregated Giving: a community forms around a cause, and collective action is planned and carried out without the need for organizations. Fulton cites Warren Buffet as an example of this – he gives away his money to causes he deems worthy without forming his own nonprofit to do so.
- Innovation Competition: by issuing an invitation to help innovate to solve a problem, donors compete with each other to raise the most money, identify the best solution, innovate. This puts the emphasis on solving the problem instead of supporting a specific institution or organization.
- Social Investing: matching social capital markets for social enterprise to maximize impact and return on investment for donors and beneficiaries, such as micro-loans for business development or competitors banding together to tackle business problems in areas around the world.
Fulton says we don’t have language to begin to describe these disruptions. We are just developing them because these are so new and unformed as of yet. She is confident we will get there, and that all of us will be active, engaged, committed, philanthropists in ways of our own choosing and doing.
What do you think about the philanthropic changes afoot? Do you see other disruptions beginning to take hold? Do you agree with Katherine Fulton’s disruptions? Can you identify more? What is your organization or agency doing to create a donor involved organization?
Featured image attribution: http://www.philanthropists.org/